Civilian Board of Contract Appeals Provides Precedence on Concurrent Delay and Extended General Conditions
On November 13, 2019, the Civilian Board of Contract Appeals provided precedence on how to address concurrent delay in AMEC FOSTER WHEELER ENVIRONMENT & INFRASTRUCTURE, INC. v. DEPARTMENT OF THE INTERIOR. This is welcome news . . .there has been little precedence on how to evaluate concurrent delay.
The Board began with the proposition that "only delay of activities on a project's critical path results in overall delay." The Board then considered an "as-built critical path" to determine the extent the government and contractor delayed the project.
The government's expert found that all government-caused delay was offset by concurrent contractor-caused delay. Specifically, the government expert maintained that delays to the shower room were "near critical" to the actual critical path delay caused by Modification #1. The Board rejected this approach:
We reject the agency's contention that all of the agency-caused delay was offset by concurrent, contractor-caused
delay. We recognize that "the exact definition of concurrent delay is not readily apparent from its use in contract
law." George Sollitt Construction Co. v. United States, 64 Fed. Cl. 229, 238 n.8 (2005). We do not doubt that the
agency's expert relied on one possible definition in opining that "near-critical" work in the shower room was
"concurrent" with the modification 1 work until April 2014 and would have delayed the project if modification 1
had not. The problem we see with that approach is that the alternative delay did not materialize. To analyze delay
claims in a manageable fashion, we focus on the fact that "only construction work on the critical path ha[s] an
impact upon the time in which the project [i]s completed." Mega Construction Co. v. United States, 29 Fed. Cl. 396,
425 (1993), quoted in Affiliated Western, 2017-1 BCA at 179,403. The parties agree that the shower room repairs
were not critical after August 2012. That work thus did not result in delay. We limit our analysis to the critical path
delay that happened.
Based on the above, the Board will recognize concurrent delay only if it also impacted the critical path. This limits when concurrent delay can be raised. Since from a technical standpoint, in order for two (2) activities to drive the critical path at the same time (and hence concurrent according to the Board), they both must have precisely the same amount of "days of negative float" during a particular CPM update period.
The Board's approach also rejects delay analyses that ignore what actually happened. If a contractor maintains an accurate CPM throughout the project, that will suffice. But oftentimes, we do not have the luxury of regular and reliable CPM updates. This is where the experts play a role. They must forensically demonstrate what actually delayed the project through an as-built CPM analysis. While this can be painstaking, this is what the Board prefers.
The Board also provided guidance on how to price general conditions. General conditions are "direct costs" of performing the work that are time sensitive. Examples include onsite supervision, rental equipment, trailers, fencing and other costs that continue to mount each day a project is delayed. For these costs, the Board held that the contractor must add up the general conditions for the entire job and compute an average daily rate. Then, this average daily rate can be multiplied by the days of delay:
Claimants can recover extended general conditions costs when compensable delay causes them to remain on a project longer than planned. The general conditions costs caused by the delay are the company's average daily rate for the entire job multiplied by the days of delay.
The above approach means that the contractor must either wait until the job is complete before submitting a claim for general conditions, or estimate what the total general conditions will be at the end of the project.
If you are considering submitting a delay claim against the government, please call our office for a complimentary consultation.
